Lloyd's Maritime and Commercial Law Quarterly
RETENTION OF TITLE IN MIXED AND PROCESSED GOODS
Coleman v. Harvey
Many years ago Lord Moulton remarked on the uncertainty of English law as to title when goods of different owners were mixed1 and this theme was taken up by Robert Goff and Oliver, L. JJ., in Clough Mill v. Martin
2 when they expressed the view that a seller retaining title under a Romalpa clause might by suitable drafting retain that title even after his goods had been mixed and processed with the goods of other owners.3 This was despite the fact that in Borden v. Scottish Timber Products
4 it had been held that the application of an irreversible process which destroyed the identity of goods in which title had been retained abrogated that title, although there the retention clause was not expressly framed to operate after the processing.
The speculations of Robert Goff and Oliver, L.JJ., have now gained confirmation in the New Zealand Court of Appeal in Coleman v. Harvey.5 The defendant Coleman, whose company ran a precious metal refinery, agreed on behalf of the company to take possession from Harvey of a quantity of coins which would, when smelted, produce 166 kilograms of silver. The coins were mingled with some of the company’s own silver which it was smelting at the same time and from the ingots produced it was to hold 166 kilograms for Harvey. None was set aside; the company disposed of all the silver in the course of trade and went into receivership. On demand from Harvey, 49 kilograms were then delivered to him and he brought an action for conversion, alleging that the defendant was jointly liable with the company in respect of the balance.
The defendant argued that the transaction relating to the coins was either a sale or mutuum, a contract of Roman law analogous to loan, under which ownership in money or fungibles, such as corn or oil, passed to a borrower on his undertaking to return an equivalent of the same subject-matter.6 Cooke, P., rejected this because it ignored the fact that some of the silver from the plaintiff’s coins was to be embodied in the ingots to be delivered to him, though if the 166 kilograms had been properly
1. Sandeman & Sons v. Tyzack & Branfoot S.S. Co. Ltd. [1913] A.C. 680, 695.
2. [1985] 1 W.L.R. 111.
3. Ibid., 119, 123.
4. [1981] Ch. 25.
5. [1989] 1 N.Z.L.R. 723.
6. See Halsbury’s Laws of England, 4th edn., Vol. 2, para. 1534; Buckland, Textbook of Roman Law 3rd edn. (1963), 462–465.
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